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Piatts describe progress on transforming a former Downtown department store

From the rooftop of the former Lazarus-Macy's department store, Downtown Pittsburgh dances in a ballet of steel and brick, grittiness and elegance.

The shiny glass steeples of PPG Place mix with low-slung buildings on Fifth and Forbes avenues and old gems like the Commonwealth Building, Union National Bank and the Arrott Building.

Architecture shrouded at street level becomes more visible, from gargoyles to the crouching Atlas-like figures holding up one roof.

"When we came up here and looked at it, in two seconds we said we're buying this building," said Lucas Piatt, vice president of real estate for Washington County developer Millcraft Industries.

It's a perspective some people will soon be experiencing daily, in one form or another, as the Fifth and Forbes renaissance prepares to kick into full gear with the failed store's transformation.

Mr. Piatt and his father, Jack, Millcraft chairman, discussed the project and the progress to date during a tour last week with a Pittsburgh Post-Gazette reporter and photographer.

In its first foray into Downtown, Millcraft purchased the Lazarus building from Federated Department Stores for $8.5 million in late 2005 with the intent of transforming it into housing, shops and office space, offering a ray of hope to the downtrodden Fifth and Forbes corridor.

Lately, the Piatts have found their biggest challenge is convincing people there is actually work going on in the building, renamed Piatt Place. But that shouldn't be a problem too much longer.

By the end of the summer, steel should be rising from the roof, forming the skeleton for 65 luxury condominiums that will add three floors to the four-story building.

To date, 19 of the 65 condos have been sold. One New York investor purchased three units for more than $1 million near the corner of Oliver Avenue and Smithfield Street.

Another buyer, who is moving from the suburbs, bought two units for $1 million on Fifth Avenue.

Lorrie Andria, the sales manager for the condos, which start at $320,000, doesn't hesitate to take prospective buyers to the roof.

"People are really wowed by the view," she said. "Each side of the building really has some unique characteristics. Each side has its own distinct selling features."

The most popular spot so far has been Fifth Avenue, where eight condos have been sold. Of the three floors, most buyers have gravitated to the seventh, or top floor, where nine units have been taken.

Little more than a year before the first condos are to be occupied, Mr. Piatt said he is comfortable with the pace of sales so far. Several blocks away, the Carlyle in the Union National Bank building has sold 21 of 60 condo units.

"It's pretty exciting for us that we're selling our vision, selling our dream and people are actually buying during pre-construction, which is a challenge, especially in a market where this is all new and fresh to everybody," Mr. Piatt said.

The three levels of condos will be situated around a center courtyard to be built on the current roof, now little more than a repository for bulky heating and cooling units.

Outside at street level, little has changed about the store, part of an expensive bid by former Mayor Tom Murphy to rejuvenate the Downtown retail corridor. But inside is quite a different story, particularly on the spacious first floor, only a few years ago a haven for shoes, jewelry, cosmetics, handbags and lingerie.

"Six years ago this would have been the women's department. Now you can order a martini," said Lucas Piatt, standing in what will be the bar area of the Capital Grille steak house at Fifth and Wood Street.

Studs have replaced sales in that corner, as more than 10,000 square feet of space is being partitioned for a main dining room and smaller private rooms. The outline of the arch-shaped kitchen is visible and coolers to age beef have been installed.

The restaurant is expected to open in July, providing the first taste of the building's transformation.

On the other side, at Wood and Oliver, the shell of McCormick & Schmick's Seafood Restaurant is just beginning to form in anticipation of a late fall opening.

The two restaurants will serve as bookends for the building's street-level retail activity. The Piatts are negotiating with a financial services company to occupy the middle of the Wood Street block. They also hope to recruit a high-end fashion retailer to occupy one or two levels at the back end of the store, on Fifth Avenue near the old Revco building.

They have scrapped plans for a European-style gourmet market, moving that concept to the G.C. Murphy building, another old store Millcraft is converting into apartments and shops.

Lucas Piatt said the Murphy building is an "equal or better location" for the market, which will sell prepared foods, lunch meats, specialty breads, produce and other items.

Three floors of Lazarus-Macy's escalators in the heart of the store already have been removed, but the large circular openings that accommodated them remain.

A ceiling is being added on the first floor, but openings elsewhere will stay in place and become a shaft for a massive skylight to be built on the roof.

Andy Starnes, Post-Gazette
The living room and kitchen, above, and master bedroom, below, of the model condominium on display at Piatt Place. To date 19 of the 65 condos have been sold.

Click photos for larger image.

The Piatts like to refer to the Lazarus project as "Southpointe in a box," referring to their sprawling Interstate 79 development near Canonsburg that mixes housing, office space, recreation and retail.

"We're changing an elephant into a giraffe," Lucas Piatt said of the Piatt Place work. "We're taking something that was retail and changing it into a new species."

The three upper floors of the store are slated for office space, but so far there have been no takers.

Millcraft has been trying to lure either the Jones Day or Cohen & Grigsby law firm, or both, to the building, but neither has made a decision. Lucas Piatt said a couple of other firms also have expressed an interest.

"It's kind of a waiting game at this point," he said.

For now, the space on those top three floors will remain just as it is -- wide open with much of the original Lazarus-Macy's carpeting, flooring and fixtures still in place.

The idea, Lucas Piatt said, is to allow office tenants to reconfigure the space to suit their needs.

Echoes of the building's recent past are everywhere, from signs for "Customer Service," "Juniors" and "Bed in a Bag" to Polo Ralph Lauren posters and even some cabinets that were left behind.

"It's like they just got up and left," Jack Piatt said.

With much of the heavy construction still to come, the Piatts already have committed nearly $10 million to a project that is expected to run $65 million. It's little wonder they give some extra attention to the things they find as they rummage around the department store.

"We checked every drawer to see if there was any cash lying around," Jack Piatt said with a chuckle.

This is an interesting project, I'm suprised they haven't been able to pre lease the office space yet, not a good sign IMO. It will be interesting to see the 3 new floors being put on top, yet another big crane in the city. The resturants will be cool.